Tax reductions, late pay create shortfall for Carbon schools

The Carbon School District coffers are a little short this year, even though the district has cut $730,000 of spending from its budget. And the shortfall is beyond the district's control.

"We thought we would be in good shape this year until we found out that the assessment on some taxpayers in the area were down and collections were off," said Darrin Lancaster, the district's business administrator, in an interview Tuesday.

The problems come because when properties are either reassessed or a challenge is made to the assessment and the taxpayer ends up paying less. Sometimes it ends up being retroactive. That means that rather than just not collecting money they thought they were going to get for the present year, the school district also has to pay back money for past years as well.

"Last year we had to return $220,000 because of the challenges that some taxpayers put up in the area," he said. "This year we have to give back $259,000 because Union Pacific Railroad's properties were reassessed."

But having to give back money that was already spent is only half the problem.

"Tax collections are slow this year," said Lancaster. "We don't get our money until property owners pay their taxes. That could be in a year or five years, of if they don't pay when the county seizes the property and sells it to collect."

In some ways it is like being a starving man who is told he won't get food for the next six months. Obviously he could be in big trouble before he gets it. However the district does have something in the pantry to make up for the withheld money.

"We have some reserves to take care of this for now," stated Lancaster.

It's obvious that this kind of situation can't go on and on forever either. The reductions in what the district spent this last year has helped the situation immensely according to Lancaster.

"We saved most of that $730,000 on the cost of reduced benefits to employees," he said. "We used to offer a couple of insurance plans, one of which had a very low deductible, but by going with one plan and raising that deductible we were able to save about $500,000."

The district has also been taking some non-teaching positions and rather than hiring full time people to replace the attrition there, they have been making those jobs part time.

"For instance in some schools we used to have two full time custodians," he said. "Now we are moving away from that model and have one full time person and some part time people."

The district thought those reductions would really put them on top of the financial heap but then "the revenues just dropped off," he said.

Of course taking from reserves can also be a problem if when things are better they are not replenished for another rainy day. That is especially true in these days of low or non-existent pay raises for employees who look to an organization to help improve their financial lot when things get better.

"We have an understanding with our employee associations that if we do get money from from back taxes that that money must go into refilling the reserves when we have used funds from them," stated Lancaster.

School districts must have independent financial audits each year, and the auditing agency for this past year has been Smuin, Rich and Marsing. While the district has received the audit already, it will not be formally presented to the Board of Education until the regular January 2014 meeting.

Some of the problems with tax collections and reduced assessments will be part of that audit report.